If so and if the funds you used for the payment came from a 529 plan, you may have to re-contribute the money to avoid being taxed and penalized.
*Note: This article is about a specific 529 program but the information applies to all of them.
Due to the COVID-19 pandemic, you or your beneficiary may have received a refund for tuition, fees, room and board or other qualified higher education expenses. If your student’s eligible educational institution issued you a refund, here are a few things to know about recontributing the funds to your my529 account.
To avoid tax penalties, the recontribution must:
- Occur within 60 days of the refund date
- Not exceed the refunded amount
- Be deposited into a 529 account for the same beneficiary